We need to build collective intelligence through networks—engaging emerging markets in the impact investment conversation.
This summer, the G7 countries plus Australia released National Advisory Board recommendations on impact investing. This amazing effort has yielded focused, targeted policy recommendations–and while policy is not top-of-mind in the typical impact investing conversation, it matters more than the layperson would think. I highly recommend you read the reports. It’s fascinating, for example, to see the difference in focus in the US–which is largely private-sector driven, vs. the UK, which is much more focused on driving private capital to the nonprofit sector.
The reports from Italy and Japan probably sparked the most thought, however, as they contained ideas and perspectives I don’t typically hear in mainstream conversations. Although not necessarily new, it clarified an important concept: The mainstream acceptance of impact investing is still largely a Western concept, yet non-western players are leading much of the terrific work in impact investing. Investors always talk about the “exit problem”—how impact investors have yet to realize liquid, cash returns from investments. But India-based Aavishkaar, founded by Vineet Rai, has more exits than any other early-stage impact investing fund I know of (though I’d love to be proven wrong). Yet groups like Aavishkaar are rarely in the high-level impact investing conversation.
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At Village Capital, while all our work has a global focus, 50 percent of our programming is in emerging markets. And we see a very distinct difference between investor motivations and attitudes from market to market. In Southeast Asia and Latin America, high-net-worth individuals, foundations, family offices are quite intrigued by impact investing; in Africa and India, to date, interest has been far less. In India, major domestic corporations (Tata, Mahindra, YES Bank) are far quicker to grasp the concept than even many US companies. And even US impact investors interested in investing in the US have very different motivations, tools, and interests than impact investors globally.
The GIIN’s engagement going forward would do well to draw from the collective intelligence region-by-region to enable entrepreneurs, fund managers, and asset holders to understand what’s the same—and what’s different—across regions. If we’re resource-constrained, rather than one large global gathering in a Western city, I’d like to see a “road show” of small gatherings in ten cities (from Mexico City to Jakarta) to understand what impact investing looks like from the asset holder, the fund manager, and the entrepreneur’s approach.
This is the fourth post of a five-part series that focuses on leadership and the growing impact investing landscape.